Global unemployment is likely to return to pre-pandemic level in 2023, ILO report

Global unemployment is likely to return to the pre-pandemic level in 2023, according to the International Labour Organisation’s (ILO) latest report, ILO Monitor on the World of Work–11th edition, released worldwide on Friday.

Global unemployment is likely to return to the pre-pandemic level in 2023, according to the International Labour Organisation’s (ILO) latest report, ILO Monitor on the World of Work–11th edition, released worldwide on Friday. The ILO report pitched for global financial support for job creation and social protection during a time of multiple crises and shocks, such as inflation and Ukraine crisis.

The report also suggested policy steps such as wider social security net to take on the crisis and ensure recovery and reconstruction. “While some large emerging economies, such as India, have returned to strong economic growth, low-income countries are facing high levels of debt and rising costs of borrowing, which further constrain their efforts to promote decent and productive employment,” the report said.

ILO Director General Gilbert F. Houngbo said releasing the report that its findings were a stark reminder of growing global inequalities. “Investing in people through jobs and social protection will help narrow the gap between rich and poor nations and people. This is why the ILO is launching a Global Coalition for Social Justice. The Coalition will bring together a wide range of multilateral bodies and stakeholders. It will help to position social justice as the keystone of a global recovery, and make it a priority for national, regional, and global policies and actions,” said Mr. Houngbo.

The report stresses the critical importance of creating fiscal space for social investments in low-income countries. “This needs to be considered with urgency as part of the current global discussion on the reform of the international financial architecture,” the ILO said.

The ILO’s latest estimates project that the global unemployment rate will fall by 0.1 percentage points in 2023. “This implies a decline in the total number of globally unemployed people of one million, which is due to greater-than-anticipated labour market resilience in high-income countries in the face of the economic slowdown,” the report said.

It added that there are signs that further interest rate hikes in high-income countries will be limited as central bankers start to prioritise concerns about the health of the economy. “Interest rates in many low- and middle-income countries are expected to remain stable or decline. Nevertheless, the risk of the global economy entering a recession remains sizeable, creating a major downside risk for global labour markets,” the ILO said citing a recent study by the International Monetary Fund.

It said emerging evidence suggested that implementing a social protection floor for older persons could contribute to boosting economic growth, mainly through accelerating the demographic transition and decreasing countries’ reliance on agriculture. “Several country-level studies have shown that old-age pensions lead to decreases in desired family size and, consequently, in fertility rates,” the report said.